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Silicon Shock: The Rising Cost of SSDs and Flash Memory (and What You Can Do About it)

By ·Categories: I/O HUB, View from the Edge·Published On: April 19th, 2017·4.7 min read·

UPDATE 11/15/2017: Since the publication of the article below, in April of 2017, the NAND flash market has continued to fluctuate. We’re working with our suppliers to ensure memory and storage availability at the most competitive prices possible, but we wanted to give you an update on overall market conditions.

While 2D flash has begun to shown signs of stabilizing, pricing remains volatile as the industry shift to 3D NAND rolls on, making it imperative for users to begin transitioning to 3D NAND as soon as possible to ensure continued availability and, eventually, more stable pricing. At this point we hope to see flash prices level out by Q2 or Q3 of next year, but continuing fluctuations in demand, which currently outstrip supply, are having an outsized impact on overall market pricing.

As for DRAM, recent cell phone releases have consumed much of the available stock, driving a worldwide shortage of DRAM chips, which is expected to continue through the end of the year and into Q1 of 2018. In an effort to mitigate both DRAM and NAND shortages, we’ve stepped up our multi-sourcing efforts to onboard and test flash-based products from additional global leaders in RAM and storage solutions. Having multiple suppliers means that not only do our customers have more options to select from on our website, but that we’re also able to work with them to source the right solution for their needs and budget if and when a particular vendor becomes supply constrained.

We continue to pursue every available avenue to offer our customers the best possible value and service as this industry-wide challenge evolves.


Prices go down, performance goes up. It’s one of the fundamental joys of technology. Yet, since August of last year the cost of solid state memory products–including solid state drives (SSDs), system DRAM and flash memory– has been on a relentless upward march. Industry research firm DRAMeXchange reports that the average price of flash memory products has risen by more than 9 percent each month since January, while SSD prices were expected to jump by as much as 16 percent in the first quarter of 2017. Anecdotal information from various suppliers and retailers puts the overall increase in flash memory prices at more than 75% since just last summer.

The Unstable History of Memory Prices

Though memory prices generally go down as capacity goes up, every other year or so we see periods of limited supply and increased demand that drive prices up. The current crunch, for instance, follows a period of price declines that started in 2014 and is the most severe we’ve seen. The current run up is strong enough that IT buyers may need to consider alternatives when outfitting systems.

What’s behind the memory price jump?

For one, global memory manufacturers like Samsung, Micron and Toshiba are in the midst of a challenging transition to an advanced, solid state memory technology called 3D NAND. NAND is non-volatile flash memory used in SSDs and other storage. As the name implies, 3D NAND stacks layers of memory cells–up to 64 of them, in fact–in the silicon wafer. The effect is a bit like replacing a block of brownstone buildings with a high rise.

3D NAND vastly increases memory density, but making this stuff is not easy. Companies are behind schedule as they struggle to perfect manufacturing techniques and deliver products in volume. What’s worse, they’ve moved away from 2D NAND manufacture, further restricting supply. All this while deployments of SSDs continue to rise.

Makers of dynamic RAM (DRAM) system memory are struggling with a manufacturing transition of their own, as they shrink transistor sizes below 20 nanometers (nm) to achieve higher density and efficiency. Combined with rising demand for server and mobile memory, the shortfalls have yielded a 12.5 percent increase in DRAM prices entering the second quarter, according to DRAMeXchange. Prices aren’t expected to ease until at least the third quarter of 2017.

All this hits industrial PC (IPC) buyers especially hard. Solid state memory products can account for one-quarter to up to one-half of the total cost of an IPC. And switching to spinning hard drives isn’t an option, as SSDs are a core enabler of ultra-reliable fanless, ventless and low-power IPC designs. Analysts agree that the downward march of prices will eventually resume, but likely not until the end of this year.

What can IT buyers and managers do now to address the price changes?

One solution is to buy now. If you have IPC procurements coming in the next six months, you might accelerate some of those to avoid upcoming price increases. You might specifically consider working with your system vendor to buy memory component products in advance. (At Logic Supply, a number of our customers have effectively locked in prices for their future deployments by purchasing several months worth of components and consigning them to our warehouse.)

Another option is to work with your vendors to explore configuration alternatives that can ease the blow. Look into lower capacity SSDs or scaled down system DRAM configurations. Or in appropriate situations consider using less expensive triple-level cell (TLC) flash memory, which trades performance and durability for higher data densities.

Finally, consider sharing your storage and memory purchase plans with your vendors so they can better negotiate with manufacturers.

The good news in all this: Once manufacturers work through their teething pains with 3D NAND and sub-20nm process technology, supplies will return to normal and drive prices lower. The trend toward lower prices could start in the third or fourth quarters of 2017, analysts say, though a lot depends on how quickly manufacturing challenges are put to rest.

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About the Author: Ryan Karp

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